Darcey’s brain dump on all sorts of things on her favorite subject….Money! Email: darcey.martin@d2dsolutions.com

What the Fed Cut means for the average Joe…

Since the fed cut a key interest rate to a record low yesterday, it is now set between 0 and .25%, I figured I would touch base and give a little added explanation. What that means to everyday people is that Prime also went down by 3/4 point or .75% to 3.25%. So any variable rate tied to Prime just went down, equity lines, Credit Cards and potentially ARM’s. This can be a nice little drop for people to see on their statements. Now, I challenge you, please continue to pay what you had been paying or take the extra money that you may see from the drop and put it towards your highest interest rate that you are paying(if anyone needs help figuring out how this works, just contact me and I can help you figure out the best game plan). If anyone has been following “My Dilemma”, this rate cut has made the dilemma obsolete, now it is the 4.5% mortgage against the 3.25% equity line, both interest only, no brainer, all extra money will go to the Mortgage, which means lower payments when it recalculates next April, it is an ARM, but when it calculates it will probably reset to 3.75%. They even wrote in the article that the Fed plans to keep it at those levels “for some time”. I figured this is encouraging and I hope Americans take the opportunity to begin whiddling down their debt, but if they don’t I guess it will be good for the economy since they will be spending more. I just pray that this doesn’t de-value the dollar any more because then we will be in trouble the other way. I guess the Fed is trying to throw everything at this economy to see what works, I am afraid we are in for a rough road and all we can do at this point is take care of our own finances and hope that the big guys are doing the same and can keep this thing together.